University R&D Funding Strategies in a Changing Federal Funding Environment

M. E. Blume-Kohout, K. B. Kumar, N. Sood
2014 Science and Public Policy  
This paper evaluates how changes in US National Institutes of Health (NIH) funding levels affected US universities' total biomedical R&D efforts, over a period of dramatic change in the federal funding environment. Instrumental variables estimation reveals that during the NIH budget doubling period (1998)(1999)(2000)(2001)(2002)(2003), each federal dollar that US universities received spurred an additional $0.26 in research support from non-federal sources, with stronger complementarity found
more » ... ong historically less-research-intensive institutions. However, in the more competitive postdoubling environment (2006 onwards), the more research-intensive PhD-granting universities substituted funding from non-federal sources to maintain stable levels of R&D expenditures. In contrast, at non-PhD-granting and historically less-research-intensive institutions, total R&D funding and expenditures declined overall with reduced availability of federal funds. However, the effect of successful federal applications on subsequent non-federal investment remained significant and positive for this latter group, suggesting federal R&D funding may play an important signaling role.
doi:10.1093/scipol/scu054 fatcat:u2j4yg2wcvcx5kktbfp2naywpu